No. Just... no! There's stuff that goes well in live-action (or that we simply don't care if it gets ruined by some American studio), and then there's stuff that should never,
ever be shittified with real-life actors.
Kakurenbo - most definitely - is among the latter. Unfortunately, not everyone sees things our way. In fact, there are enough blasphemers in this particular case, that they're planning to make a live-action movie based on the supernatural horror anime short otherwise known as Hide and Seek.

According to
ANN, the dreadful revelation was made at the ongoing Anime Expo 2009 by Joshua Long - executive producer of the upcoming live-action film
Cowboy Bebop. The dude also said that one of Kazuo Koike's works may be getting a live-action adaptation, as well, but he left fans guessing as to which one it might be:
Lone Wolf and Cub, Crying Freeman, or... whichever.
Anyway, getting back on topic, I just can't see how a story like that of Kakurenbo could be "tweaked" (i.e. dumbed down, demistified, and happy-ended) for a Western audience. Nor why. Nor do I wish to find out.